Locked Token Holders Face 50% Losses Amid Unlock Events

• Locked tokens saw 50% average loss over the past year.
• $40B worth of altcoins still await unlocking.
• OTC sellers likely to face deep discounts when exiting.

Growing Pressure on Locked Token Holders

Over the past year, holders of locked tokens have endured significant financial pain. According to blockchain analytics firm STIX, these investors have seen an average 50% decline in token value from over-the-counter (OTC) prices to current spot market prices. These losses are particularly concerning for early-stage backers and project insiders who often receive tokens through private deals with vesting periods.

The value erosion suggests a consistent pattern where unlocked tokens flood the market, pushing prices lower. For many, the hope of holding through the lock-up period for better returns has turned into a frustrating waiting game with diminishing returns.

The $40 Billion Question: What Happens Next?

More than $40 billion worth of altcoins are still scheduled to unlock in the coming months. This massive supply overhang poses a fresh challenge to the market. Investors looking to exit their positions in OTC markets are likely to face another round of steep discounts — STIX projects an average 50% drop from previous valuations.

This situation could amplify selling pressure and hurt already fragile market sentiment. With fewer buyers willing to pay high premiums for soon-to-be-unlocked tokens, sellers may be forced to accept much lower prices.

How This Affects the Broader Crypto Market

These unlocks don’t just affect the token holders; they ripple across the broader market. Projects may struggle to retain long-term investor interest if prices continue to slide post-unlock. Meanwhile, retail investors watching from the sidelines might grow wary of investing in tokens with large upcoming unlocks, potentially leading to reduced liquidity and confidence.

The unfolding scenario highlights the importance of transparency in tokenomics and the need for investors to assess unlock schedules before entering a project. Without careful planning, holding locked tokens might end up being more costly than beneficial.